Inditex Doubles Down On It Sustainability Commitments As Pablo Isla Underscores “The Strength Of Inditex’s Integrated, Digital And Sustainable Model”

Image Courtesy of Inditex

The Executive Chairman announced that Inditex will bring its net zero emissions target forward 10 years to 2040.

The Group is also bringing several other sustainability targets forward. This includes aiming for all its cotton to be more sustainable or recycled by 2023, two years ahead of schedule.

• Pablo Isla reviewed Inditex’s performance in 2020 at today’s Annual General Meeting.

• He highlighted that the “commitment, talent and work displayed by the entire team in 2020, and the flexible and integrated business model, has delivered results in the most complex environment”.

• The Group’s net cash position remains solid – ending the fiscal year at €7.56 billion. The Company’s shareholders ratified the Board of Directors’ motion to pay a dividend of €0.70 per share, thus extending the policy of paying out 60% of net profit.

At today’s Annual General Meeting at its headquarters in Arteixo, Inditex’s shareholders ratified the Group’s financial results for fiscal year 2020, a period in which revenue reached €20.4 billion despite the fact that all of its stores were forced to shut at some point on account of the COVID-19 pandemic.

Online sales via the global integrated platform increased by 77% in local currencies to €6.6 billion, making Inditex a global leader in online fashion retailing. 

During his presentation to the Group’s shareholders, Pablo Isla highlighted “the strength of Inditex’s strategic transformation and its fully integrated, digital and sustainable business model. This, combined with the commitment, talent and  work displayed by the entire team, delivered noteworthy results in extremely difficult circumstances. As we expected, the transformation we embarked upon in 2012 continued to bear fruit”, said Pablo Isla.

Delivery And Ramp-Up Of Sustainability Targets

Another cornerstone of the strategic transformation, carried over from prior years, is the Group’s sustainability effort. Pablo Isla outlined how in 2020 the Group not only delivered its targets but brought forward the delivery of certain milestones. 

Some 35% of the Group’s garments carried the Join Life label, which designates more sustainable processes and raw materials, ahead of the 25% target set for the year.

In addition, 80% of the energy used came from renewable sources, compared to the target of 65%. The use of more sustainable cotton also increased by 91%.

Against this backdrop, Inditex’s Executive Chairman announced to  shareholders that the Group was setting out the following objectives:

• The Net zero emissions target will be brought forward by a whole decade to 2040 (previously 2050).

• All of the cotton Inditex uses will be more sustainable by 2023, two years ahead of schedule.

• All energy in its direct operations will come from renewable sources in 2022 (compared to a target of 80% in 2025).

• Over 50% of garments will be Join Life by 2022, the label that distinguishes the Group’s most sustainable products.

• As a new objective, Inditex aims to cut by 25% the water used on the whole supply chain by 2025.

In parallel, the Group will continue to make progress on its existing commitments, such as the elimination of plastic, a strategy based around two milestones: in 2020 the company eliminated all plastic bags from its stores and online orders; by 2023 it plans to eliminate all single-use plastics from customer interfaces.

All the materials the Group uses in its operations (cardboard, plastic, paper…) will also be completely recycled by 2023.

In fabrics, by 2023 all garments made of cellulosic fibres will be 100% sustainable and by 2025 all polyester and linen will be 100% recycled or sustainable, in line with the parameters the company has set out.  

The Group will continue to champion innovative research in textile recyclability over the coming years, working with partners from across the supply chain, as well as with  prestigious research centres such as the Massachusetts Institute of Technology (MIT).

The Group will also forge ahead with all the programmes encompassed by its ‘Worker at the Centre’ strategy, designed to respect and promote social conditions in the supply chain.